Breaking With the Buck

Some institutional money-market funds will no longer be able to keep the stable $1 NAV ... but that could affect more retail investors than intended.

Change finally swept through the money-market mutual fund industry last week. After nearly two years' worth of controversy, regulators are now requiring what was once unthinkable -- mandating certain money funds to adopt a floating net asset value, akin to other mutual funds.

Money-market funds have long maintained a stable net-asset value of $1.00, an assurance that investors can get out exactly what they put in, whenever they want. Funds achieved this by investing in short-term, high-quality debt (some government-backed,...